Australia to fall out of top 20 economies by 2050

Business Reporter

Australia is expected to drop out of the world’s 20 biggest economies by 2050 as fast-growing developing countries such as Argentina, Nigeria and Vietnam overtake it, a report says.

China is projected take over the US as the world’s largest economy by 2017 with a gross domestic product in purchasing power parity (PPP) terms of $US53,856 billion, the report by accounting firm PricewaterhouseCoopers found.

By 2050, India is expected to be the world’s third largest economy, behind the United States. Brazil would be ranked fourth, ahead of the Japan.

‘‘The report shows that all the talk about the Asian Century is certainly very true,’’ PwC economist Jeremy Thorpe said.

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‘‘That’s a combination of ... the continued urbanisation and the next phrase of development of these countries. And it’s coupled with the demographics of these countries - young populations in a different cycle of growth.’’

Australia, which is currently ranked in 17th place in PwC’s 2011 list, is projected to slide one spot down to 18th by 2030, with an estimated GDP at PPP of $US1535 billion.

But Australia’s projected GDP at market exchange rates (MER) - at $US2603 billion - is expected to keep the country in 19th place, just ahead of Argentina.

‘‘The key thing for Australia is that we will become less significant globally because the size of our economy in relative terms is smaller,’’ Mr Thorpe said.

‘‘But we will still be an advanced economy with high per-capita incomes. People will still look to us as an important country ... but in absolute terms our significance is going to decrease and that’s just a rebalancing of the global economy as the less-developed countries become more developed over time.’’

In October, Australia was ranked as the world's 12th largest economy by the International Monetary Fund in its World Economic Outlook.